QUESTION:

Find WACC (discount rate)

Additional Info:

Analysts expect the firms revenues, earnings, capital expenditures, and depreciation to grow at 9.9% a year from 2019 to 2021, after which time the growth rate is expected to drop to 3%.

The depreciation expense for 2019 is $5.182 billion.

Capital spending is expected to offset depreciation in the stable state period.

The yield on 30-year treasury bonds is 2% and the equity market risk premium is 6.2%.

The shares outstanding as of 12/31/2019 were 3,516,000,000 and the stock price was $60 per share.

The average price of the companys long-term corporate Bonds was 123.95 with an average yield to maturity of 4.16%. The companys long-term bonds have a bond rating of AA.

All sumber in the sands, US Dollar 31-Dec-19 31-Dec-18 31-Dec-17 Total Mart Stores, Inc. Balance Sheet for Perlind Lading Ats QA Cash And Cash E wa 7.995.000 7.907.000 7275.000 3.905,000 34.514.000 325,000 5. 9.000 36.318.000 3.091.000 51.893,00D 107 878,000 16,763.000 429.000 180,663,000 One Current Assets To Current Assets Property Plan and Equiment Goodwill Other Act Total Assets 49.000 32.713.000 .000 46.032.000 102.307.000 6.20,000 3 942.000 170.407,000 95.653,000 15260.000 3.567.000 103 429,000 52,415,000 6,022,000 47,000 47,638,000 7.660,000 ,000 Liabilis Current L es Accounts Payable Short Current Long Term Debt Other Current Labs Total Current Liabilities Long Term Date Deferred Long Term Liability Charges Minory interest Total Liabilities Stockholders' Equity Mise Stocs Options Warrants Common Stock 58,484.000 43.842,000 6.682,000 $0.632,000 4.919,000 2,000 55.543,000 36.404,000 500.000 280.000 99.632.000 $5,300,000 34 540,000 14,000 1.704,000 111,713.000 1000 408,000 352.000 63.967,000 3.577.000 65 000 307,000 378,000 66.357.000 3.800.000 70 000 397,000 301000 3.660.000 3.520.000 20 000 Capital Surplus Orro Equity Total Sto r Equity Total L & Owners Currency in USD $8.542.000 160.663.000 70.468.000 17040700 45.285.000 9 342.000 uity Period Ending 31-D-19B1D9 91 Dec 17 Total Rey 42842.00 345 287.000 4 .S009 3044100 1 000 Gross Profit 106.562.000 100.641,000 10,313.000 Operating Expenses Sling General and Administrative including Depren pense 81.020,000 79,639.000 77,546.000 Operating income or Less Total Other compenses Net Earnings Balore interest and Taxes 25.542.000 201.000 25,743,000 2205.000 23,538,000 24,002000 181.000 24,183.000 22,767.000 284 000 23,051.000 22,118.000 20,647.000 Income Before Tax Income Tax Expense -512.000 14,942.000 400.000 13,734.000 15,953,000 Net Income From Continuing Ops Non recurring Events Den persons 16.389.00 16,389,000 14,370.000 14,370.000 13,341.000 3,341.000 Net Income Applkable To Common Shares 1 Trading Information-Total-Mart Stores Inc. 04/30/2020 Current Stock price (04/30/2020) $54.58 0.44 3.516Billion Shares Outstanding Estimated growth rate in carings (2 Equity Market risk premium long term)